For professionals and entrepreneurs starting a business in Singapore, choosing the right legal structure is a balance between protection and simplicity. The Limited Liability Partnership (LLP), governed by the Limited Liability Partnerships Act, offers a unique middle ground.
An LLP is a hybrid business vehicle that combines the benefits of a partnership (flexibility in internal management) with those of a private limited company (separate legal personality and limited liability). In 2026, as Singapore continues to lead in digital transformation, the LLP remains a preferred choice for professional service providers like accountants, lawyers, and consultants who want to collaborate without risking their personal assets for their partners’ mistakes.
This guide provides a definitive look at the LLP structure, its tax implications, registration steps, and how it stacks up against other entities.
Key Takeaways
- Separate Legal Personality: An LLP is a legal entity distinct from its partners. It can own property and enter into contracts in its own name.
- Limited Liability: Partners are generally not personally liable for the business debts or the wrongful acts of other partners.
- Tax Transparency: Unlike a company, an LLP is not taxed at the entity level. Instead, profits are treated as the personal income of the partners.
- No Audit Requirement: LLPs are generally not required to have their accounts audited, significantly reducing compliance costs.
- Perpetual Succession: The LLP continues to exist despite changes in the partnership (e.g., death or resignation of a partner).
- Identifier: Every LLP is issued a Unique Entity Number (UEN) by ACRA.
Why Choose an LLP? Key Advantages
1. Protection from Liability
In a traditional partnership, every partner is “jointly and severally” liable for the business. In an LLP, your personal assets (home, savings) are protected. You are only liable for your own wrongful acts, not the negligence of your partners.
2. Operational Flexibility
LLPs are not bound by the rigid corporate governance of the Companies Act. There is no requirement for a Company Secretary or a Board of Directors. Partners can define their roles, profit-sharing, and management duties through a private Partnership Agreement.
3. Lower Administrative Burden
Because there is no mandatory audit and no requirement to file complex financial statements (unless the LLP is insolvent), the cost of maintaining an LLP is much lower than a Private Limited Company.
Comparison Table: LLP vs. Pte Ltd vs. Sole Proprietorship
| Feature | LLP | Private Limited (Pte Ltd) | Sole Proprietorship |
| Legal Status | Separate Legal Entity | Separate Legal Entity | No separate legal status |
| Liability | Limited | Limited | Unlimited |
| Taxation | Tax Transparent (at Partner level) | Corporate Tax (17%) | Personal Tax |
| Audit Required? | No | Yes (if thresholds exceeded) | No |
| Secretary Needed? | No | Yes (Mandatory) | No |
| Annual Filings | Annual Declaration | Annual Return & FS | Business Renewal |
Registration Process with ACRA
Registration is done entirely online via the BizFile+ portal using Singpass.
- Partners: Minimum of two (2) partners. Partners can be individuals or corporate entities.
- Manager: At least one manager must be “ordinarily resident” in Singapore (Singapore Citizen, PR, or eligible pass holder).
- Registered Office: You must have a physical Singapore address.
- SSIC Code: Select the correct Merchant Category Code (MCC) or SSIC code to define your activities.
- Fees: The name application fee is S$15, and the registration fee is S$160.
Taxation in 2026: The “Tax Transparency” Rule
This is the most critical difference for LLPs in Singapore. The Inland Revenue Authority of Singapore (IRAS) treats an LLP as “tax transparent.”
- No Corporate Tax: The LLP does not pay tax as an entity.
- Partner Level Tax: The share of profits is added to the partner’s other income.
- Individual Partners: Taxed at progressive personal income tax rates.
- Corporate Partners: Taxed at the prevailing corporate tax rate (currently 17%).
- GST: An LLP must register for GST if its annual taxable turnover exceeds S$1 million.
Compliance Requirements
While simpler than a company, an LLP must still fulfill these duties:
- Annual Declaration: You must lodge a declaration with ACRA every year stating whether the LLP is solvent (able to pay its debts) or insolvent.
- Record Keeping: You must maintain accounting records and supporting documents for at least 5 years.
- Display UEN: Your Unique Entity Number (UEN) must be displayed on all invoices, receipts, and official correspondence.
Did You Know?
As of 2026, LLPs can utilize Virtual Accounts to manage partner contributions and distributions more efficiently.
By assigning a unique virtual account to each partner, the LLP can automate the tracking of capital injections and ensure that monthly draws are reconciled instantly through the FAST network.
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Conclusion: Is an LLP Right for You?
The Singapore LLP is the ideal structure for professionals who prioritize ease of management and tax transparency. If you don’t intend to raise venture capital (investors almost always require a Pte Ltd) and want to avoid the overhead of a company secretary and annual audits, the LLP is a robust and protected vehicle for your growth. By leveraging a modern payment platform to manage your incoming revenue, you can focus on your professional expertise while keeping your financial trail audit-ready.
Frequently Asked Questions (FAQs)
1. Can one person start an LLP in Singapore?
No. An LLP requires a minimum of two partners. If you are a solo entrepreneur, you should consider a Sole Proprietorship or a Private Limited Company.
2. Are LLPs eligible for startup tax exemptions?
No. Since LLPs are tax-transparent, they do not qualify for the “Tax Exemption Scheme for New Start-Up Companies.” However, individual partners can still claim personal tax reliefs.
3. Does an LLP need a partnership agreement?
While ACRA does not strictly require a written agreement to register, it is highly recommended. Without one, the default provisions of the First Schedule of the LLP Act apply, which may not suit your specific business needs.
4. How do I pay my taxes as an LLP partner?
The LLP will issue you a statement of your share of profits. You then report this under “Trade, Business, Profession or Vocation” in your individual Income Tax Return (Form B or B1) via the myTax Portal.
